Background
Alta Power, L.L.C. sought to build peaker plants in Texas and contracted with WattStock for refurbished turbines supplied by General Electric International, Incorporated. The Master Agreement between Alta and WattStock included a mutual waiver of consequential damages that extended to subcontractors. Alta later sued GE for tort claims, arguing GE was not an intended third-party beneficiary, that the waiver was void due to fraudulent inducement, and that it did not cover intentional torts. The district court granted summary judgment to GE, and Alta appealed.
The court’s reasoning
The court applied Texas law to reject Alta’s arguments. First, the court found GE was an intended third-party beneficiary because the waiver’s plain language covered subcontractors and the parties intended to directly benefit that class. Second, the court held that under the Texas Supreme Court’s decision in Bombardier, sophisticated parties represented by counsel can enforce limitation-of-liability clauses even when fraud is alleged, as the waiver did not preclude a fraud claim entirely but only limited damages. Third, the court ruled that the phrase any cause of action, combined with the word including, indicated an expansive intent that covered intentional torts, rejecting the argument that the listed examples were exclusive.
The Waiver applies to intentional torts.
Alta Power, L.L.C. v. General Electric Int’l, Inc., No. 25-10774, slip op. at 15 (5th Cir. July 1, 2026)
What it means going forward
The ruling reinforces that broad contractual waivers of consequential damages can protect non-party subcontractors and remain enforceable against sophisticated parties even when fraud or intentional torts are alleged, provided the contract language is clear and the parties were represented by counsel.